Coffee traders with responsibility

Jan Kees van der Wild trades coffee. The plant that yields those precious beans has its roots – as does all of mankind – in Eastern Africa. The cultivation and processing of coffee affords jobs and the opportunity to develop for the countries of origin. But the trade aspect also plays a key role.

“Volcafe demonstrates a much greater local commitment than one would expect of a “normal” trading house with razor-sharp margins.”

Ten tiny cups are lined up in a row. The scent of freshly brewed coffee pervades the laboratory at Volcafe in Winterthur. The aroma as a whole: an admixture of the most commonly traded beans, Arabica and Robusta, as well as several rare concoctions from more than 100 varietals and combinations. Jan Kees van der Wild sniffs a sample of one with an unusually fruity bouquet. The beans for this particular tasting hail from eastern Africa – Ethiopia, Uganda, Kenya, Tanzania and Mozambique – and are renowned for their outstanding quality.

Van der Wild heads the Commodities Division of London-based ED&F Man, a company established in 1783 and which today trades agricultural commodities – mainly sugar, molasses and coffee beans – on a worldwide scale. The company’s coffee-related activities have been consolidated into its Swiss subsidiary since 2005. The reason: roughly two-thirds of the global trade in raw coffee beans is handled out of Switzerland. “Here, we can find the know-how and the professionals we need,” says the boss of a team comprising of coffee traders and commodity specialists.

Volcafe, a descendant of Winterthur-based trading company Gebrüder Volkart, today ranks No. 2 in the global commodity coffee trade. Each year the company ships some 13 million sacks, roughly equivalent to 780,000 tonnes of the beans. Volcafe has its own representative offices in 14 of the 20 largest coffee-producing nations. The local buyers purchase raw coffee beans from farmers, like in Papua New Guinea, or huge plantations such as those situated in Brazil. These days, the East African exporting countries account for only a small portion of the total.

Like fine wine

But from this part of the world, home to the coffee bush, the bracing brew began its triumphal march round the globe: at present, more than 1.5 billion cups of coffee are consumed each day – tendency increasing. Coffee is still a prized luxury item, as was already the case in the 18th century – even though its enjoyment is no longer a sole prerogative of the aristocracy. “One speaks about coffee the same way one does about a fine wine,” says van der Wild. And at Starbucks or a trendy metropolitan café, one in fact frequently pays more for it than for a glass of wine.

Once the beans have been dried and undergone their initial processing – i.e. sortation, selection and preparation according to customer requirements – Volcafe’s commodity is shipped to wholesale buyers such as the multinational food companies, major coffeehouse chains and large domestic roasting plants, where the raw beans are trans­formed into the consumable end product. The company also supplies smaller processors on the West Coast of the USA, certain parts of Asia and in Australia.

Employment for millions

Van der Wild commutes between his offices in London and Winterthur: two days here, two days there. A considerable amount of business travel is also on his agenda – the customers are demanding and do business on a global scale. Once or twice a year he also goes to Africa, and that takes time: the byways to remote mountain regions are long and at times tedious. “The infrastructure is not comparable with what we take so much for granted in our environs,” he notes. What impresses him when he’s there? “That most of the locals are friendly and have high hopes – regardless of their economic situation. We should learn something from that.”

The cultivation of coffee provides work for millions of people, also in Africa, where the mechanisation of harvesting and processing is not as far advanced as it is in other places. The ultimate buyers are interested in maintaining long-term relationships with the farmers and traders and have high quality standards. Also for those reasons, Volcafe demonstrates a much greater local commitment than one would expect of a “normal” trading house with razor-sharp margins – this by means of specialised training for nationals, investments in schoolhouses, as well as medical care and access to potable drinking water in the villages.

Expertise for coffee farmers

With their own expertise, the Volcafe representatives – who perceive themselves as entrepreneurs rather than traders – lend the local farmers a helping hand. They assist in the procurement of appropriate fertilisers as well as recommend the replacement of coffee bushes at the right time and arrange for new seedlings. When called for, the upcoming harvests are hedged in the commodities market in order to protect the farmers from the risk of price fluctuations.

“Transforming the raw beans into an aromatic delight in a demitasse takes a lot of know-how: from the selection and initial treatment to the storage and transport, and ultimately to the blending and refinement.”

When van der Wild speaks about these successes or his personal encounters with coffee farmers, one immediately notices the importance he attaches to taking on social responsibility. Only when the topic turns to corruption – unfortunately a widespread scourge indigenous not just to Africa – does he turn livid: “It may play no role whatsoever in our business.”

Knowing how to grow good coffee is one criterion for quality; knowing how to process it is the other. Transforming the raw beans into an aromatic delight in a demitasse takes a lot of know-how: from the selection and initial treatment to the storage and transport, and ultimately to the blending and refinement. Before the sacks in Winterthur are simultaneously offered and sold by trading specialists either via telephone or computer display and then sent on their way to roasters, Volcafe experts test each lot. This is accomplished either on-site in Eastern Africa and the other producing countries or later in the labs at Winterthur, where tastings of each sort are conducted. “In our business, you can’t outsource that task,” Jan Kees van der Wild says with a grin. So it’s no wonder that the company’s motto is: “We know coffee best.”

A thoroughbred trader

When Jan Kees van der Wild talks in private circles about his profession, faces tend to turn blank. The commodity trade is usually considered dull, not exactly awe-inspiring, and its image could use a little brushing up. But trading is in the blood of this native Dutchman and he has been doing it all his life.

This 52-year-old, who lives with his family in the vicinity of Zurich, has spent practically his entire career in the commodities field. He got his start trading molasses in the Netherlands, where the corresponding business unit of his current employer, ED&F Man, is headquartered today. His subsequent professional tour of duty took him to far reaches of the world: he worked for years in the USA and in Brazil.

After completing advanced studies at IMD in Lausanne, he received a call from Winterthur and since 2009 has headed Volcafe’s coffee trading division there. In the meantime, he has also assumed responsibility for all the commodity segments of the parent company.

With close to 3,700 employees and presence in more than 60 countries, ED&F Man is one of the largest globally active trading houses for agricultural commodities. Founded in 1783 and headquartered in London, the company was publicly listed only from 1994 until 2000; today, management holds the majority of its shares. Aside from coffee and molasses, sugar represents the third pillar of the company’s commodity trading division. ED&F Man is also involved in transportation – mainly sea freight – as well as brokerage and financial services.